Navistar International (NAV) 8-K Information provided and statements contained in this presentation that are not purely historical are

3rd Quarter 2009 Earnings

Presentation

September 10, 2009

Exhibit 99.1

Safe Harbor

Statement

2

Information provided and statements contained in this presentation that are not purely historical are

forward-looking statements within the meaning of Section

27A of the Securities Act of 1933, as

amended, Section

21E of the Securities Exchange Act of 1934, as amended, and the Private Securities

Litigation Reform Act of 1995. Such forward-looking statements only speak as of the date of this

presentation and the Company assumes no obligation to update the

information included in this

presentation. Such forward-looking statements include information concerning our possible or assumed

future results of operations, including descriptions of our business strategy. These statements often

include words such as “believe,”

“expect,”

“anticipate,”

“intend,”

“plan,”

“estimate,”

or similar

expressions. These statements are not guarantees of performance or results and they involve risks,

uncertainties, and assumptions. For a further description of these factors, see Item

1A, Risk Factors,

included within our Form 10-K for the year ended October

31, 2008, which was filed on December 30,

2008, and Item 1A, Risk Factors, included within our Form 10-Q for the period ended July 31, 2009,

which was filed on September 9, 2009.  Although we believe that these forward-looking statements are

based on reasonable assumptions, there are many factors that could affect our actual financial results

or results of operations and could cause actual results to differ materially from those in the forward-

looking statements. All future written and oral forward-looking statements by us or persons acting on

our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to

above. Except for our ongoing obligations to disclose material information as required by the federal

securities laws, we do not have any obligations or intention to release publicly any revisions to any

forward-looking statements to reflect events or circumstances in the future or to reflect the occurrence

of unanticipated events.

Other Cautionary Notes

•

The financial information herein contains audited and unaudited

information and has been prepared by management in good faith

and based on data currently available to the company.  

•

Certain Non-GAAP measures are used in this presentation to assist

the reader in understanding our core manufacturing business.

We

believe this information is useful and relevant to assess and

measure the performance of our core manufacturing business as it

illustrates manufacturing performance without regard to selected

historical legacy costs (i.e. pension and other postretirement costs).

It also excludes financial services and other expenses that may not

be related to the core manufacturing business.  Management often

uses this information to assess and measure the performance of our

operating segments.

A reconciliation to the most appropriate GAAP

number is included in the appendix of this presentation.

3

Summary

•

2009 Q3 results

•

2009 outlook

•

2010 and beyond

4

Traditional U.S. and Canada Retail Sales

Class 6 –

8 Industry Landscape

5

Worst truck Class 6-8 Truck industry in

more than 45 years

•

1991 –

225,000

•

1992 –

238,000

•

2003 –

263,000

•

2008 –

244,100

Reality:

•

Age of fleet increasing

•

Ability to finance

•

Used truck market

•

EGR vs. SCR

Lowest retail industry since 1962

Lowest retail industry since 1962

Note: Industry guidance includes military orders sold to the U.S.

Industry

FY99

FY00

FY01

FY02

FY03

FY04

FY 05

FY06

FY 07

FY08

School Bus

33,800

33,900

27,900

27,400

29,200

26,200

26,800

28,200

24,500

24,400

21,000

23,000

Class 6-7 -

Medium

126,000

129,600

96,000

72,700

74,900

99,200

104,600

110,400

88,500

59,600

34,000

42,000

Combined

Class

8

(Heavy

&

Severe

Service)

286,000

258,300

163,700

163,300

159,300

219,300

282,900

316,100

206,000

160,100

110,000

120,000

Total Industry Demand

445,800

421,800

287,600

263,400

263,400

344,700

414,300

454,700

319,000

244,100

165,000

185,000

FY 09

Historical Information

United States and Canadian Class 6-8 Truck Industry -

Retail SalesVolume

Current 2009

Actual

Guidance

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

3Q07

3Q08

3Q09

With

Settlement

Effects

3Q09

Without

Settlement

Effects

0

5,000

10,000

15,000

20,000

25,000

30,000

3Q07

3Q08

3Q09

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

3Q07

3Q08

3Q09

Q3 FY09 Information

6

Consolidated Revenues

($ in millions)

$3,951

$2,506

$473

$110

$115

$2,956

$92

Manufacturing Segment Profit ($ in millions)

0

20,000

40,000

60,000

80,000

100,000

120,000

3Q07

3Q08

3Q09

Quarterly Truck Shipments

27,000

17,000

24,600

Quarterly Engine Shipments

79,300

63,600

108,200

Shipments decreased ~37% Q/Q

Shipments decreased ~20% Q/Q

1

1,2

1

Includes extraordinary gain of $23 million for Monaco  

2

Excludes $(18) million in manufacturing segment profit and $(18) million in net income for Settlement Effects (see page 8for additional detailed disclosure on settlement effects)

Note:  This slide contains both GAAP and non-GAAP information, please see the Reg G in appendix for detailed reconciliation.

1

7

•

Continue to invest in future

•

Containing automotive supply

base risk

•

Military cancellation charges

Q3 FY09 Information

Diluted Earnings (loss) per share

$(0.16)

$4.47

$(0.05)

$(0.42)

Profit Excluding Tax ($ in millions)

$18

$341

$5

$0

1

1,2

1,2

Note:  This slide contains both GAAP and non-GAAP information, please see the Reg G in appendix for detailed reconciliation.

1

Includes extraordinary gain of $23 million for Monaco  

2

Excludes $(18) million in manufacturing segment profit and $(18) million in net income for Settlement Effects (see page 8for additional detailed disclosure on settlement effects)

$0.00

$50.00

$100.00

$150.00

$200.00

$250.00

$300.00

$350.00

$400.00

3Q07

3Q08

3Q09

With

Settlement

Effects

3Q09

Without

Settlement

Effects

-$1.00

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

3Q07

3Q08

3Q09

With

Settlement

Effects

3Q09

Without

Settlement

Effects

Impact of Settlement on 2009

8

Business Impact of Settlement

•

Loss of automotive U.S. customer

•

Less intensive capital/product requirements

•

Restructured business

•

Impact of increased equity stake in BDT & BDP

(in millions)

Q1 Actual

Q2 Actual

Q3 Actual

Full Year

Guidance

Cash

200

$          

200

$          

Warranty

75

75

Restructuring charges

(58)

3

(65)

+/-

Other related income and (expense)

(27)

(35)

18

(35)

+/-

190

$          

(32)

$          

18

$            

175

$          

+/-

Settlement and Related Restructuring - 2009 PBT Impact

Medium

Truck

3Q09 School Bus, Class 6-8

Market Share was 36%

61% Market Share

3Q09

35% Market Share

3Q09

33% Market Share

3Q09

Severe

Service

Truck*

Heavy

Truck

29% Market share

3Q09

•

#2 in YTD July Market Share

•

Executing on strategy

-

New Products (ProStar

®

,

LoneStar

®

)

•

MaxxForce

®

EGR

engines

•

#1 In Market Share despite

industry consolidation

•

MaxxForce

®

EGR

engines

•

#1 in Market Share

•

A leader in Medium Hybrid

•

MaxxForce

®

EGR

engines

•

#1 in Market Share

•

3rd straight year of

increasing market share

•

MaxxForce

®

EGR

engines

FY07

60%

FY08

55%

3Q09

61%

YTD JUL

59%

*Note: Excludes U.S. Military shipments. See market share slide in appendix for shipments with and without military shipments.

FY07

36%

FY08

36%

3Q09

35%

YTD JUL

35%

FY07

25%

FY08

27%

3Q09

33%

YTD JUL

34%

FY07

15%

FY08

19%

3Q09

29%

YTD JUL

25%

9

Class 8*

30% Market Share

3Q09

School

Bus

School Bus & Combined Class 6-8 Market Share – FY07: 26%; FY08: 29%; 3Q09: 36%; YTD JUL: 33%

Guidance -

Industry Landscape

10

Guidance

•

Class 6-8 Truck Industry

2009: 165K to 185K

2010: 175K to 215K

•

Engine shipments –

245K to 265K

•

Parts –

segment revenues

expected to  be ~$2.2B to $2.3B

•

Financial Services -

profitable

Note: Industry guidance includes military orders sold to the U.S.

Industry

FY99

FY00

FY01

FY02

FY03

FY04

FY 05

FY06

FY 07

FY08

School Bus

33,800

33,900

27,900

27,400

29,200

26,200

26,800

28,200

24,500

24,400

21,000

23,000

Class 6-7 -

Medium

126,000

129,600

96,000

72,700

74,900

99,200

104,600

110,400

88,500

59,600

34,000

42,000

Combined Class 8 (Heavy & Severe Service)

286,000

258,300

163,700

163,300

159,300

219,300

282,900

316,100

206,000

160,100

110,000

120,000

Total Industry Demand

445,800

421,800

287,600

263,400

263,400

344,700

414,300

454,700

319,000

244,100

165,000

185,000

FY 09

Historical Information

United States and Canadian Class 6-8 Truck Industry -

Retail SalesVolume

Current 2009

Actual

Guidance

Industry Landscape

11

•

Retail sales industry landscape:

–

2009 school bus and Class 6-8

Truck (industry):

Q3 2009 Class 6-8 = 41,100

•

Order receipt landscape

–

August order receipts

Bus: ~4,250

Medium: ~4,250

Combined Heavy: ~9,300

–

Highest month since June 2008*

•

Gas vs. diesel prices

•

Inventory

•

U.S. motor carrier failures

Average Age U.S. Class 8

Truck Tonnage Index

*Combined School Bus and Class 6-8 orders

Severe

Service

Medium

Heavy

Bus

Actual

Truck Production 2009

12

Actual

Expected

2008

2009

Down Days (Q3 2009 unplanned ) = 39 days

Commodities 2009

Commodities 2009

•

Reduced volatility & lessened market

impact through contract structures

•

2009 costs have declined with a lag

to the market

•

Market consensus: commodity prices

will continue to recover through the

end of 2009

–

Renegotiating contracts

–

Forward-locking prices

–

Enhancing our risk management

tools and practices

–

Controlling more spend

13

2008

2009

2010

Market

Navistar

Sheet steel

2007

2008

High

Aug 09

Spot

$2.83

$4.09

$3.28

Copper

$0.90

$1.54

$1.23

Aluminum

$1,241

$2,275

$1,360

Platinum

$73

$145

$72

Crude oil

$315

$890

$311

Scrap steel

$509

$1,125

$538

Full Year 2009 Guidance

14

6/9/09

9/10/09

Guidance

Guidance

$5.10 to $5.60

$2.80 to $3.10

Industry Volume Reduction to 210,000 to 225,000

(-

-

-)

Industry Volume Reduction to 165,000 to 185,000

(-

-

-)

Warranty

(-

-)

R&D spending

(-)

Taxes

(-)

Customer Mix

(-), offset by

SG&A below

Offsetting Actions

Lower commodity Costs / cost reductions

+

Blue Diamond JV operational impact

+

Military revenue:  $2.7B to $3.0B

+

Market Share

+

Parts profitability

+

SG&A / Below the Line items

+

+, offset by

customer mix

above

Revised EPS Guidance*

$2.80 to $3.10

$2.55 to $2.85

Settlement and Restructuring

$2.40 +/-

$2.40 +/-

$5.20 to $5.50

$4.95 to $5.25

additional facility rationalization

Prior EPS Guidance *

Key Challenges

We continue to invest today, to ensure the future

Revised EPS Guidance - Including Settlement & Restructuring*

* Note: Excludes settlement and related restructuring as well as potential

Note:  This slide contains non-GAAP information, please see the Reg G in appendix for detailed reconciliation

Full Year 2009 Guidance

15

*Note:

This

slide

contains

non-GAAP

information,

please

see

the

Reg

G

in

appendix

for

detailed

reconciliation

2009 Summary

We expect to deliver EPS* of $4.95 to $5.25,

while continuing to invest in the future

16

•

Product development

•

Global growth

•

Product enhancements

*Includes Ford settlement effects

Actions in 2009 for 2010 and Beyond

•

Truck strategy

–

U.S. and Canada

–

Environmental strategy

–

Mahindra

–

Cat J.V. pending

–

Monaco

–

Commercial bus

–

Military

•

Engine strategy

–

MaxxForce

®

Big Bore

–

Global and domestic expansion

–

EGR

–

Engine platform rationalization

–

Manage supply chain risk

•

Corporate

–

Pension

–

Capital structure

17

0%

5%

10%

15%

20%

25%

30%

35%

FY 2007

Retail Share

FY 2008

Retail Share

3Q09

Retail Share

3Q09

Order Share

Combined Class 8*

Retail Market

Share

Order Receipt

Share

Actions in 2009 for 2010 and Beyond

Profitable Growth: Class 8

*Excludes U.S. Military shipments

18

Current status:

•

More than 18 months of testing between engine

labs and field test units

•

60 test vehicles in operation today

•

Validation testing includes:

–

High-altitude and high-temperature testing  in

Nevada and mountainous regions of Colorado

–

Cold weather testing conducted this past

March in northern Minnesota

–

We will continue to test, validate and make

necessary calibration adjustments this winter

Next steps:

•

Customer units delivered this fall

•

Media ride and drive

•

Receive EPA certification prior to 2010 launch

Controlling Our Destiny

2010

Engine

Testing

-

On

Track

or

Ahead

of

Schedule

19

20

MaxxForce

15L status and strategy

Actions in 2009 for 2010 and Beyond

15 Liter 2010 Emission Strategy

Current status:

•

More than 9 months of testing, which

includes high-altitude and

high-temperature testing

•

Provide advance production units to

strategic customers later this year

•

Production in late calendar 2010

Actions and product attributes to

ensure success in 2010:

•

Transition some 15L customers to the

MaxxForce

®

11L/13L

•

Significant engine weight savings

•

Better manage heat rejection

•

Product testing on/ahead of schedule

Today

2009 Transition

2010

Big Bore

11L-15L

11L/13L

46%

15L

54%

<425 hp

12%

425-455 hp

64%

475-550 hp

24%

MaxxForce

®

11L/13L

330 hp-475 hp @ 1900

rpm

1250-1700 hp lb.–ft.

@ 1000 rpm

21

Summary-2010 Emission Strategy Status

2010 emission strategy on/ahead of schedule

•

All engines will be between .4 and .5 NOx

•

Engine durability testing is on track and plan to over-test and stress many parts of

the system

•

In most cases, vehicles will have equal to better fuel economy than 2009 vehicles

•

Base engine will have less heat than 2009 engines

•

ProStar

®

weight will be reduced by 600 lbs.

•

MaxxForce

®

13L will have over 1,000 lbs. of weight advantage vs. a competitive

15L SCR engine

Actions in 2009 Position Us for Success in

All End Markets

22

Medium

Truck

61% Market Share

3Q 2009

35% Market Share

3Q 2009

33% Market Share

3Q 2009

29% Market Share

3Q 2009

Heavy

Truck

School

Bus

Severe

Service

Truck

2009 Industry:

Heavy Day Cab –

16%

Heavy Sleeper –

30%

Actions in 2009 for 2010 and Beyond

2010 Emission Strategy

23

How EGR Technology Works

Competitor “A”

–

announced its Environmental

Protection Agency (EPA) 2010 emissions reduction

technology using

selective

catalytic

reduction

(SCR)

will

carry

a

surcharge

of

$9,600.

Competitor “B”

–

“anywhere

from

$8,000

to

$10,000

is

a

range

that

everybody

is

aware

of.

There's certainly no secret about that.”

Navistar’s strategy is to price competitively.

Status of Future Technology:

Advancing at a Rapid Pace 

24

Customer Friendly and Controlled by the OEM

Alternative

technology

advancement

to

achieve

0.2

NOx

1.In-cylinder Combustion Improvement (EGR approach)

a)

Advanced fuel system (high injection pressure), air/EGR system, and advanced control,

advanced vehicle cooling

b)

Brake thermal efficiency improvement

better fuel economy

less heat rejection

2.Advanced

NOx

after

treatment

system

(Customer

friendly

and

controlled

by

the

OEM)

a)

Dual function DPF, NOx

reduction diesel Particulate filter (“NPF”

Navistar naming) with the

following options

i.

Gas ammonia injection

ii.

Hydrocarbon injection

b)

Hydrocarbon

or

Hydrogen

Injection

-

Lean

NOx

Trap

(LNT)

3.

Powertrain

integration

(Hybridization

and

advanced

transmission

technology

(longer

term))

Actions in 2009 for 2010 and Beyond

Supply Base and Competitor Migration South

•

Competitor:

x

•

Supplier:  

OEM         Mexico

OEM         Exited business

OEM         Consolidated

operations

Supplier 1         Nuevo

Supplier 2         Mexico

Supplier 3         San Luis

Supplier 4         Texas

•

Customer Growth

in Southern

corridor:

Escobedo Plant

x

x

x

Chatham Plant

25

Mahindra J.V. –

Vehicles Ready for Launch in Early 2010

26

Bus -

#1 leader in school bus

Overall commercial vehicle industry

(in units)

Truck 

Note:

Mahindra

FY

–

April

to

March

Mahindra/Navistar

J.V.

is

a

51%

-

49%

joint

venture

150,000

170,000

190,000

210,000

230,000

250,000

270,000

290,000

310,000

330,000

350,000

FY 2009

Actual

FY 2010

Estimate

FY 2011

Estimate

FY 2012

Estimate

Actions in 2009 for 2010 and Beyond

Caterpillar/Navistar Strategic Alliance/Joint Venture

27

•

Strategic alliance

to

manufacture

a

heavy-duty

Caterpillar vocational truck

•

Manufactured by Navistar at Garland, TX

•

Industry dynamics

-

Market size historically has ranged from 40K

to 80K. 1/3 of the market is mid-range diesels

(MRD) and 2/3 of the market is heavy-duty

diesel (HDD)

-

Navistar severe service market share in FY08

was 27%. (MRD was 40% and HDD was

13%)

Global

Commercial

Truck

Markets

Outside

of

N.A.

North America Caterpillar Vocational

•

50/50 joint venture for commercial trucks outside

of N.A. 

•

Leverages the complementary strengths of both

companies

-

CAT –

distribution

-

Navistar –

manufacturing and product

development

•

Initial markets –

Australia, Brazil, China, Russia,

South Africa and Turkey

•

First products are expected to be available in

fiscal Q1 of 2010

28

Transaction Overview:

•

Acquisition price ~ $47 million, effective June 1, 2009

•

Expected revenue of $600 million to $1 billion by end

of 2011

•

Five manufacturing facilities

•

All trademarks and intellectual property

•

Acquiring assets at the lowest point in over 30 years

•

Goal to be breakeven at lowest industry volumes

in cycle and capitalize on upswing as the market

returns

Type:  Class A

Monaco has a full line product offering and is a leader in the Class A market

Type:  Class C

Type:  Towable

Class A Industry Sales

Actions in 2009 for 2010 and Beyond Monaco

22

10

14

19

33

42

34

33

41

42

35

29

24

27

32

37

33

37

38

43

49

41

33

40

42

41

37

32

29

16

7

0

5

10

15

20

25

30

35

40

45

50

1979

1986

1993

2000

2007

RVIA: University of Michigan Forecast Baird Research

(in thousands)

29

Truck Leadership

Electric

Vehicle

(EV)

–

Zero

Emission

•

Received $39

million

commitment

from

Stimulus

Act

and

Technology

Funding

opportunities to fund our existing plans to be leaders in commercial electric vehicle

market

•

Utilize existing manufacturing facilities (Elkhart County, Indiana), which brings job

opportunities

•

Next steps –

finalize J.V. with Modec

Ltd., of the United Kingdom

Goal is to build 400 all-electric vehicles in 2010 and expect that within a couple of years to be

producing several thousand vehicles annually.

Actions in 2009 for 2010 and Beyond

Navistar Environmental Strategy

30

Red

Bull

Purchases

New

International

®

DuraStar™

Hybrid Delivery Trucks

Trucks save 30%-40% fuel costs while

reducing CO2 emissions

UPS, EPA, Eaton, Navistar Agree: “Hydraulic

Hybrid Vehicles Ready for Prime Time”

Development Strategy:

Provide time for

technology progress

EPA rewards providers for cleaning up

the environment sooner

Advanced EGR provides the platform to

continued emissions improvement

The best technology will continue to improve…

Electronics and

Control Strategies

Advanced Fuel

Injection Technology

Higher injection pressure

3000 bar

Proprietary Combustion

Bowl Designs

More complete burn

Twin turbochargers

Air-Management Systems

Actions in 2009 for 2010 and Beyond

Leveraging Our Assets –

Midibus

and Rest of World Opportunities

31

Rest of World Focus

•

Capitalize on large market in South America

•

Emerging market in Mexico driven by government funding

Partnership with Neobus

•

Start of production expected in November

•

Low cost/high quality design capability

•

Long-term potential for U.S. and Canada

Midibus

-

Integrated Commercial

NOTE: J.V. pending -

MOU with San Marino (Neobus) for integrated 

commercial bus body J.V. assembly plant in Mexico

Develop Products to

Compete Beyond

Yellow

61% Market Share

3Q 2009

School

Bus

32

More than 21K Units

invoiced from 2005

through July 2009

Commercial Off The Shelf (COTS)

Military Revenue Sustainable at $2 Billion

COTS with Military Features

True Tactical Wheeled Vehicles

Recent Foreign Military Sales

33

UK OUVS

UK Husky

Allied Forces Armored MXT

Allied Forces HMMWV Replacement

HMMWV Repower

Canadian MilCots

Canadian SMP

RCMP

Allied Forces Dash with Additional Variants

Allied Forces Dash

Actions in 2009 for 2010 and Beyond

Engine

34

•

In the news:

Navistar Engine Group to supply V8 diesels to Capacity of Texas

Navistar enters engine supply agreement with developer of Daewoo

commercial buses

GM South America

•

U.S. and Canada truck growth

Big Bore engines

EGR strategy

•

Global opportunities

Mahindra Navistar Automotives Limited J.V.

Cat/Nav

Global Products J.V.

•

Niche customers

Military

Marine

U.S./Canada Truck Growth

Global Opportunities

Niche Customers

460,000

Engines

-

FY13

North

America

South

11/13L

15L

CAT/NAV JV

Military

Marine

Other OEM

America

Grow engine business from 346K engines in FY08 to 460K by end of

FY13

35

Controlling Our Destiny

Leveraging

What We Have and What Others Have Built

•

Cash and cash flow

•

Below the line

SG&A

Post retirement

Taxes

•

Capital structure

Manufacturing Cash & Cash Flow

36

Note:

This

slide

contains

both

GAAP

and

non-GAAP

information,

please

see

the

Reg

G

in

appendix

for

detailed

reconciliation.

($ in millions)

Manufacturing Cash

April 30

th

ending cash

$594

Cash flow from operations (including working capital)

$142

Capital spending/investment (Monaco)

(87)

Other cash flow impacts (fx)

22

Cash flow from manufacturing operations

$77

Accounting consolidation of Blue Diamond

80

July 31st ending cash

$751

SG&A

What did we tell you at the beginning of the year?

•

Year-over-year cost reductions

–

Other SG&A / fixed costs ~$150M

–

Professional (filing) fees ~ $100M

Where are we today?

37

2009

2008

Change

SG&A (excluding items below)

$800

$974

($174)

Professional fees

27

138

(111)

Post retirement

158

(41)

199

Total SG&A

$985

$1,071

($86)

Nine Months Ended July 31,

Post Retirement Pension & Health Care

•

Closed plan to new entrants in 2002

–

Majority of new entrants closed in 1996

–

Annual service cost is decreasing

•

2009 higher cost caused by 2008 market decline

–

Revised investment strategy/investment advisor

–

July YTD 2009 return 18.5% for pension plan and 20% for

OPEB (CY)

–

Expect cost to improve/neutral

•

Aggressive cost control, without service cuts (health care)

–

Cost contained, but too expensive

38

Taxes

39

•

U.S./Canada –

NOL position –

full valuation allowance

•

Foreign operations –

normal tax rates

Improved

business

outlook

in

Brazil

more

taxes

Production

shift

from

Canada

to

Mexico

more

taxes

One

time

favorable

items

–

Foreign

Operations

more

taxes

Overall

2009 Income tax expense of ~$46M with Ford settlement

~$15M-20M increase in expense in 2009

NFC –

Primary Purpose is to Help Us Sell Trucks

40

Dealers

Retail

•

Liquidity –

Overall $1B

–

Wholesale -

$311M

–

Retail -

$348M

–

Revolver -

$362M

•

Strategy:

–

Maintain the value of NFC

–

Reduce leverage

•

Refinancing Plan:

–

Wholesale

Renew

wholesale

VFC

–

Done

Expand capacity for market recovery

–

Retail

Work with banks to improve product

offering

for

customers

–

In

Progress

Concentration of customers

–

Bank Facility/Term Loan

Refinance bank facility/term loan to meet

strategy

–

End

of

Year

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2009

2010

2011

2012

Capital Structure

41

Capital Structure

NFC $1.4

Due  July 2010

Mfg $1.5

Due  Jan 2012

•

Initial focus on NFC

•

Balance the alternatives

-

Cost

-

Execution/market conditions

-

Shareholder value

42

Summary

Advanced EGR In-Cylinder

NOx

Reduction

Military sustainable at $2B

Appendix

43

2009 Guidance without Ford settlement effects*

44

Guidance

*This slide contains non-GAAP information, please see the Reg

G in appendix for detailed reconciliation

($

Millions

(excluding

EPS))

Truck Industry Units

165K

to

185K

Revenue

$11,000

to

$11,500

Mfg. Segment Profit

$710

to

$735

Below the line items

~$(485)

Profit Excluding Tax

$225

To

$250

Net Income

$182

To

$207

Diluted EPS

$2.55

to

$2.85

# of shares

~72M

NFC Liquidity Remains Strong

45

•

NFC

had

total

available

undrawn

committed

funding

of

$1.0

billion

at

7/31/2009

–

NFC renewed its $650 million dealer floor plan financing facility on August 26

–

NFC

has

continued

to

obtain

access

to

bank

conduit

markets

to

fund

retail

note

acquisitions;

closed

$298

million

conduit

sale

in

April

–

NFC

on

target

for

refinancing

bank

revolver

by

year-end

•

We expect NFC profitability to rebound in 2009

–

Margins improving

–

Portfolio quality stabilizing for several quarters

–

Interest rates stabilizing

•

NFC retail activity primarily funded by facilities that do not require refinancing until 2010

–

Over $1.5B in retail notes have been sold and securitized since the subprime issues began to impact the asset securitization market

–

Serviced receivables balances tracking to truck market trough

–

Truck financing is available for quality credits, especially conquest accounts

Retail Notes

Bank Revolver

•

$500 million revolving

warehouse (TRIP)

–

Acquired notes sold into TRIP

–

TRIP warehouses, then

securitizes via bank conduits

•

TRIP terms

–

Matures June 2010

On-balance sheet

•

$1.4B facility

–

Initial funding of retail

note acquisitions

–

Also funds

dealer/customer

open accounts

•

Revolver terms

–

Matures July 2010

On-balance sheet

Dealer Floor Plan (DFP)

•

Current situation

–

~$850M funding facility

(NFSC)

–

Available $311 million

•

NFSC terms

–

Bank conduit portion 

(VFC) renewed October

2008

–

Public portion matures

February 2010

Off-balance sheet

Market Share –

U.S. & Canada School Bus and Class 6-8

46

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

YTD JUL

Bus (School)

60%

60%

59%

59%

60%

57%

57%

48%

58%

55%

56%

60%

61%

NA

59%

Medium (Class 6-7)

37%

34%

34%

37%

36%

34%

35%

39%

35%

36%

30%

39%

35%

NA

35%

   Heavy (LH & RH)

16%

12%

15%

17%

15%

16%

15%

19%

25%

19%

24%

23%

29%

NA

25%

Severe Service

24%

28%

26%

32%

27%

35%

36%

34%

41%

37%

45%

49%

41%

NA

45%

Combined Class 8

18%

17%

19%

22%

19%

23%

23%

25%

30%

25%

31%

33%

33%

NA

32%

Combined Market Share

25%

25%

27%

31%

27%

29%

29%

30%

35%

31%

33%

38%

38%

NA

36%

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

Full Year

1st Q

2nd Q

3rd Q

4th Q

YTD JUL

Bus (School)

60%

60%

59%

59%

60%

57%

57%

48%

58%

55%

56%

60%

61%

NA

59%

Medium (Class 6-7)

37%

34%

34%

37%

36%

34%

35%

39%

35%

36%

30%

39%

35%

NA

35%

   Heavy (LH & RH)

16%

12%

15%

17%

15%

16%

15%

19%

25%

19%

24%

23%

29%

NA

25%

Severe Service

23%

26%

24%

28%

25%

28%

26%

26%

29%

27%

32%

36%

33%

NA

34%

Combined Class 8

18%

16%

19%

21%

18%

20%

19%

21%

26%

22%

26%

28%

30%

NA

28%

Combined Market Share

25%

25%

27%

31%

26%

27%

27%

28%

32%

29%

30%

35%

36%

NA

33%

Market Share - US & Canada School Bus and Class 6-8

2007

2008

2007

2008

2009

2009

Truck Shipments

47

Note:  Information shown below is based on Navistar’s fiscal year

Fiscal Year 2007

1Q07

2Q07

3Q07

4Q07

Full Year 2007

BUS

3,400

4,100

3,200

3,900

14,600

MEDIUM

9,700

6,800

5,600

6,600

28,700

HEAVY

7,000

4,500

2,600

3,300

17,400

SEVERE

3,900

3,300

3,500

3,700

14,400

TOTAL

24,000

18,700

14,900

17,500

75,100

MILITARY (U.S. & Foreign)

600

900

700

1,000

3,200

EXPANSIONARY

9,100

8,700

9,000

8,500

35,300

WORLD WIDE TRUCK

33,700

28,300

24,600

27,000

113,600

Fiscal year 2008

1Q08

2Q08

3Q08

4Q08

Full Year 2008

BUS

3,100

3,300

2,700

4,400

13,500

MEDIUM

3,700

6,300

5,800

4,500

20,300

HEAVY

2,600

3,900

4,500

7,800

18,800

SEVERE

2,400

3,400

3,300

3,700

12,800

TOTAL

11,800

16,900

16,300

20,400

65,400

MILITARY (U.S. & Foreign)

1,600

2,200

2,300

2,600

8,700

EXPANSIONARY

5,900

8,100

8,400

5,700

28,100

WORLD WIDE TRUCK

19,300

27,200

27,000

28,700

102,200

Fiscal year 2009

1Q09

2Q09

3Q09

4Q09

YTD JUL

BUS

2,700

3,100

3,500

NA

9,300

MEDIUM

3,200

3,400

2,700

NA

9,300

HEAVY

6,100

3,200

4,500

NA

13,800

SEVERE

2,800

2,700

2,800

NA

8,300

TOTAL

14,800

12,400

13,500

NA

40,700

MILITARY (U.S. & Foreign)

2,500

2,100

1,200

NA

5,800

EXPANSIONARY

2,400

1,900

2,300

NA

6,600

WORLD WIDE TRUCK

19,700

16,400

17,000

NA

53,100

World Wide Engine Shipments

48

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

Ford

60,000

56,200

65,400

53,500

235,100

Other OEM's (All Models)

21,000

26,400

29,100

27,700

104,200

Engine Shipments to Truck Group

23,100

12,100

13,700

16,500

65,400

Total Shipments

104,100

94,700

108,200

97,700

404,700

Navistar

1st Q

2nd Q

3rd Q

4th Q

Full Year

Ford

47,000

55,300

25,200

24,500

152,000

Other OEM's (All Models)

25,900

31,500

34,100

37,100

128,600

Engine Shipments to Truck Group

12,900

15,700

20,000

16,300

64,900

Total Shipments

85,800

102,500

79,300

77,900

345,500

Navistar

1st Q

2nd Q

3rd Q

4th Q

YTD JUL

Ford

14,100

29,000

26,200

NA

69,300

Other OEM's (All Models)

22,500

22,200

24,600

NA

69,300

Engine Shipments to Truck Group

14,300

12,700

12,800

NA

39,800

Total Shipments

50,900

63,900

63,600

NA

178,400

2008

2007

2009

Order Receipts –

U.S. & Canada

49

Percentage

2009

2008

Change

Change

3,200

3,400

(200)

(6)

2,700

4,400

(1,700)

(39)

Class 8 heavy trucks

3,800

3,300

500

15

Class 8 severe service trucks*

3,900

7,500

(3,600)

(48)

13,600

18,600

(5,000)

(27)

7,700

10,800

(3,100)

(29)

* Includes 1,400 and 3,900 units in the three months ended July 31, 2009 and 2008, respectively, related to military contracts

Total Navistar

Ended July 31,

Three Months

Order Receipts: U.S. & Canada (Units)

Combined Class 8 (Heavy and Severe Service)*

"Traditional" Markets

School buses

Class 6 and 7 medium trucks

International

Dealer

Stock

Inventory

(Units)

*

U.S. and Canada Dealer Stock Inventory

50

*Includes U.S. and Canada Class 4-8 and school bus inventory, but does not include Workhorse Custom Chassis inventory.

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Lowest point in over 10 years

Frequently Asked Questions

51

Q1:

What should we assume for capital expenditures in 2009?

A:

For 2009, excluding our NFC and Dealcor acquisition of vehicles for leasing, we expect our capital

expenditures to be below our normal $250 million to $350 million range. We continue to fund our

strategic programs. 

Q2:

What is in your  Dealcor  debt? 

A:

Dealcor debt is comprised of wholesale (floor plan) financing and also retail financing on lease and 

rental fleets.

Q3:

How many Dealcor  dealers did you have as of July 31, 2009?

A:

Of our 288 primary NAFTA dealers, we have ownership interest in 19 Dealcor dealers as of 

July 31, 2009. We expect to have fewer Dealcor  dealers on October 31, 2009. 

Q4:

Have you seen any year-over-year steel, precious metals and resin cost increases in 2009?

A:

Direct material costs have been impacted by industry-wide price increases in commodities, which 

affected all of our operations excluding financial services.  Costs related to steel, precious metals, 

resins, and petroleum products decreased by $6 million and increased by $58 million during the 

quarter and nine months ended July 31, 2009, respectively, as compared to an increase of $22 million

and $42 million for the same respective periods in 2008 and a total increase of $97 million during the

twelve months ended October 31, 2008. This is the first quarter we had a benefit of the decline in

commodity prices, although year-to-date our Truck and Engine segments were not able to fully

capitalize on some cost saving opportunities due to existing contractual obligations.

Frequently Asked Questions

52

GCWR

and

have

added

a

WorkStar

®

4x4

to

our

product

offerings.

Beyond

our

DuraStar™

and

WorkStar

®

hybrid

electric

products,

we

are

continuing

to

look

at

and

test other

Q5:

What is the status of your hybrid program?

A:

Navistar

is

currently

in

full

on-line

production

of

DuraStar™

class

6

&

7

hybrid

electric

models

at

our

Springfield Assembly plant. This hybrid product is demonstrating 30-60% improvement in fuel economy

and has been EPA certified to receive tax credits. We have received 500 orders to date and have raised

our

production

capacity

to

5

units

a

day

to

meet

the

increasing

demand.

In

addition

we

offer

a

plug

in

hybrid

IC

Bus

product.

We

recently

released

a

new

beverage

tractor

application

at

55,000

pounds

viable platforms such as the delivery of 7 hybrid hydraulic Workhorse package car chassis to UPS. This

system

uses

hydraulic

pressure

in

lieu

of

electricity

to

operate

the

hybrid

system.

They

are

showing

promise

of over 50% improvement in fuel economy.

Other hybrid platforms are in development for Class 8 products of the future. The result of this new hybrid

technology will be to substantially improve fuel efficiency and reduce the carbon footprint of our truck and

bus products of today and in the future.

Navistar has been successful in securing a U.S. Department of Energy (DoE) cost share award of up to $10

million—half

of

the

total

projected

cost,

to

develop

the

next

generation

of

Hybrid

School.

As

part

of

the

Plug-in Hybrid Electric Vehicle (PHEV) Technology Acceleration And Deployment Activity program,

Navistar will deploy 30 plug-in electric hybrid buses to fleets across the nation during a multi-year

program.

Frequently Asked Questions

53

Q6:

The future of diesel transportation is being impacted by environmental and energy issues such

as fuel efficiency, climate change and clean air.  How is Navistar responding to these growing 

influences?

A:

Navistar and its production units are fully engaged and are offering solutions on multiple fronts to the commercial truck 

industry. Aerodynamic efficiency is the single most important issue to address to improve the fuel economy of on-highway 

trucks. International

development in wind tunnels and work hard to achieve industry-leading aero-efficiency. And our recently introduced 

of aero-efficiency among premium Class 8 trucks. Another significant reduction in both fuel consumption and emissions

can be achieved by reducing idle time of on-highway trucks. Navistar was the first OE manufacturer to offer a fully

integrated no idle HVAC when the MaxxPower™ Battery Powered HVAC launched earlier this year. The MaxxPower™

Battery Powered HVAC allows drivers to operate the truck HVAC system while consuming 80% less fuel than idling the

main engine. We also believe hybrid technology will be a large part of the national response to climate change and fuel

use and we are raising our role as a contributor to energy efficient transportation solutions in the commercial truck,

commercial bus and school bus businesses. We are leveraging the natural fuel efficiency of diesel engines and vehicles in

several key moves.

We are building on our record as the leader in Green Diesel Technology, where Navistar set the pace for the industry in 

achieving this year’s historically low emission requirements. We have advanced the standard of efficiency with our new 

Navistar was recognized for leadership in the development of hybrid advanced technology in California, receiving the Blue

Sky Award for 2007 from WestStart-CALSTART. 

Navistar received a $39M commitment from the DoE to develop and deploy up to 400 Class 3 Electric Vehicles over the 

next two years. Each of these EVs will reduce the amount of carbon released to the atmosphere by up to ten tons if 

compared with an internal combustion engine vehicle in a similar duty cycle. Navistar also received $4M in funding from

the California Energy Commission to demonstrate its EV technology in CA. While in the early stages of development,

these two programs will establish Navistar as a leader in the commercial EV market.

®

ProStar

®

is the industry's most aerodynamic and fuel efficient Class 8 truck. We do extensive

International

®

LoneStar

®

,

the

first

ever

owner/operator

product

that

is

SmartWay

certified,

is

setting

a

whole

new

standard

ProStar

®

truck. And we are well into the important wave of customer interest in hydraulic and electric hybrids which will

have a substantial impact on the reduction in greenhouse gas emissions.

Frequently Asked Questions

54

Q7:

What do you finance at Navistar Finance Corporation (NFC)?

A:

NFC is a commercial financing organization that provides wholesale, retail and lease financing for

sales of new and used trucks and buses sold by the company. NFC also finances the company’s

wholesale accounts and selected retail accounts receivable. Sales of new truck related equipment

(including trailers) of other manufacturers are also financed.

Q8:

What percentage of truck purchases do you fund?

A:

We consistently fund about 95% of floor plan inventory for our dealers in the U.S. and approximately

9% of retail purchases.

Q9:

When is the next refinancing due at NFC?

A:

Our TRAC facility, which we use to finance fleet and national accounts, was extended in July and is

due for renewal in November 2009.

Q10:

Why did you extend the TRAC renewal for three months?

A:

We are re-evaluating that deal structure in light of other funding activities underway for NFC and

Navistar.

We

have

done

similar

extensions

in

the

past,

so

this

is

nothing

new

or

noteworthy.

Q11:

Why did you renew your wholesale financing facility at a lower amount?

A:

We renewed $650 million, compared to $800 million last year. We have maintained over $300 million of

excess wholesale capacity throughout fiscal year 2009, and we believe that $650 million is sufficient to

support our current wholesale needs. The need has changed because dealers are stocking less

inventory because of the low demand for trucks in today’s economy.

Frequently Asked Questions

55

Q12:

Why did you amend the intercompany agreement?

A:

We amended the intercompany agreement to allow more flexibility to NFC and Navistar by allowing

NFC to purchase short-term trade receivables that were previously not included in the agreement or

that the TRAC deal did not permit NFC to purchase.

Q13:

How do you fund retail notes?

A:

Retail notes are primarily funded by a bank revolver and a revolving warehouse facility that we call

TRIP, which

doesn’t

mature

until

2010.

These

notes

are

ultimately

sold

to

either

a

conduit

facility

or

into

a public securitization.

Q14:

Are there any requirements for NFC leverage?

A:

NFC is compliant with our revolver leverage covenant of 6 to 1. This ratio calculation excludes qualified

retail and lease securitization debt.

Q15:

How are your securitization rates determined?

A:

Portfolio performance, deal structure and market conditions affect pricing, as well as the type of asset

being

financed

(for

example

dealer

floor

plan

inventory

versus

a

customer

purchase).

Q16:

What is your funding strategy?

A:

We

use

three

or

four

primary

funding

sources.

For

longer-term

retail

truck

notes

that

finance

the

sale of

trucks to end customers, we finance those in the term securitization markets in either public or private

deals. We primarily finance our wholesale portfolio in traditional private or public securitizations. We

also have a combination of revolving type facilities that often warehouse assets until they can be

financed permanently.

Frequently Asked Questions

56

Q17:

How is your NFC portfolio performing?

A:

The portfolio is performing as we would expect given the industry downturn and consistent with prior

cycles.

The provision for credit losses increased from approximately $20 million in FY07 to $32

million in FY08.

During our first three quarters of FY09, our provision for credit losses dropped to

$21.5 million.

Q18:

How are your repossessions trending?

A:

Repossessions

were

slowing

down

at

the

end

of

FY08,

and

our

rate

of

repossession

has

significantly

declined throughout FY09.

Q19:

How are your dealers doing?

A:

We think our dealers, which have always been one of our strengths, are well positioned. We

traditionally

have

not

had

any

significant

dealer

losses

and

expect

that

trend

to

continue

in

the

future.

Q20:

Are your customer interest rates going to increase?

A:

Like all lenders, we need to achieve a profitability threshold to ensure our continued access to capital,

and

that

means

pricing

our

rates

in

line

with

the

marketplace.

So,

yes,

as

the

cost

of

financing

has

increased for all companies, we have passed on some of the cost increase to our dealers and

customers.

Q21:

What kind of rates do you charge your dealers and customers?

A:

Generally, our rates vary (those with higher credit risk have always had to pay higher interest rates)

and are usually in line with the market.

Frequently Asked Questions

57

Q22:

How

do

you

make

your

credit

decisions?

Do

you

require

a

certain

credit

score?

A:

We factor in a variety of criteria in our credit scoring model such as business model, company history,

down payment, etc.

Q23:

What is your total amount of capacity at NFC?

A:

Total availability in our funding facilities is more than $1.0 billion as of July 31, 2009.

Q24:

Are you able to take advantage of any TALF or TARP money?

A:

We

are

evaluating

accessing

TALF

funding,

if

appropriate,

when

we

issue

our

next

public

or

private

144A

transaction.

Q25:

How does your derivative expense compare to last year?

A:

Our derivative expense for the first three quarters of 2009 was $36 million, which compares favorably to

our derivative expense of $40 million in the first three quarters of 2008.

Q26:

How do your repossession percentages compare to the overall size

of your portfolios? 

A:

Repossessions

as

a

percent

of

retail

balances

were

approximately

4.5%

for

FY08

and

3.2%

for

the

first

three quarters of FY09.

Q27:

What is the current JLTV status?

A:

Navistar and BAE are moving forward with the technology development phase of the program. Australia

has expressed interest in participating and has plans to purchase test units from the three JLTV teams.

Frequently Asked Questions

58

Q28:

What is the status of the 2010 Department of Defense budget and how might it affect the request  

for trucks and tactical vehicles? Will FMTV be affected?

A:

The defense appropriation bill has been completed by the House.  It will be taken up by the Senate

appropriation committee when they return from the August recess on Sept. 8. It is highly unlikely that the

Defense bill will be completed by October 1st, the beginning of the fiscal year. It will go under a continuing

resolution similar to the rest of the appropriation bills. However, the House has supported most of the

tactical vehicle funding requested. The administration requested $5.7B for Army Tactical and Support

Vehicles. The House approved $5.25B.  FMTV was reduced $193M because of the timing of the contract

award.  FHTV was similarly reduced $129M because of the delay until FY11 of the Heavy Equipment

Transporter System (HETS) tractor contract.  The Mine Protection Vehicle Family line was reduced by

$134.7M because the need can be met with MRAP vehicles coming out of Iraq. The MRAP request of

$3.6B was reduced by $1.8B because it had been forward funded in the 09 Supplemental. JLTV is fully

funded in both the Army and Marine Corps accounts at $32M and $58M respectively. 

Q29:

What is the current timeline for the OUVS program? How many vehicles are expected?

A: 

The U.K. Ministry of Defence has postponed the Operational Utility Vehicle Systems (OUVS) program to

review spending plans for 2010. In October 2008, Navistar was selected for both the OUVS Large and

OUVS Small categories.

Q30:

Is the Husky Tactical Support Vehicle (TSV) for the United Kingdom the same as Navistar’s 

vehicle submitted for the U.S. M-ATV program?

A:

No, the Husky was developed according to U.K. specifications. 

Frequently Asked Questions

59

Q31:

When will there be a resolution to the FMTV (Family of Medium Tactical Vehicles) protest filing?

A:

Filings with the Government Accountability Office (GAO) usually require 90 to 100 days for review. 

Navistar filed its protest on September 3.

Q32:

What are the 2010 emissions requirements?

A:

The rules allow manufacturers to go to .5 NOx if they clean up the environment earlier with advanced

technology; manufacturers need to be at .2 NOx if they choose not to introduce advanced technologies

earlier. 

Q33:

Has the recent tax legislation, The American Recovery and Reinvestment Act of 2009, affected

Navistar?

A:

Two of the business tax incentives have a direct effect on Navistar:

A)  The legislation provides for additional depreciation deductions equal to 50% of the cost of non-real

property fixed assets placed in service during calendar year 2009. 

B)   In lieu of claiming the additional depreciation deductions described in (A) above, the legislation would

allow Navistar to accelerate the realization of tax credits earned in prior years. 

Navistar intends to accelerate the realization of tax credits earned in prior years.  The amount expected to

be realized is immaterial to the Company’s financial statements.

Frequently Asked Questions

60

60

Q34:

A:

How will President Obama’s recent tax proposals impact Navistar, if enacted as currently proposed?

The President’s proposals will have far reaching implications for multinational companies, such as 

Navistar. In the near term we would not anticipate a material adverse impact due to the fact that we 

currently have a full valuation allowance against a large portion of our deferred tax assets and are still 

utilizing U.S. net operating losses. Over the long term we would anticipate adverse U.S. tax implications 

for our international businesses, requiring actions to be taken by Navistar to address these implications.

Deferral of deductions deemed related to unremitted foreign earnings 

Limitations on the use of disregarded entities in foreign jurisdictions 

Limitations on foreign tax credits

Why is our tax expense so high for the quarter relative to pre-tax income?

While our pre-tax operating profit reflects the net effect of worldwide operations, our tax expense reflects

differences in U.S. and foreign operations. In general, our U.S. operations incur tax expense limited to 

current state taxes and AMT, because of the full valuation allowance position we have against deferred tax

assets. At the end of FY 2008 we also attached a full valuation allowance to our deferred tax assets in

Canada. Consequently, losses incurred in Canada during FY 2009 receive no tax benefit. Finally, our 

Brazilian and Mexican operations improved significantly from Q2 to Q3, and are fully taxable. This 

confluence of events coupled with certain discrete items in the quarter contributed to the unusual 

relationship between pretax income and tax expense in Q3.

Q35:

A:

Certain

material

proposals

impacting

multinational

corporations

include:

Frequently Asked Questions

61

61

Q36:

Your tax footnote in the 10K discloses gross deferred tax assets of $2.1 billion.  How will those 

assets be used to offset future taxable income? 

A: 

The most commonly understood component of deferred tax assets is the value of our net operating losses,

which was reported as $393 million as of 10/31/08.  We continue to offset current taxable income by these

net operating losses both in the U.S. for federal and state tax purposes and in Canada and Brazil.  In

addition, we have several other major components of deferred taxes which will reduce taxable income in

the future.  For example, to date the Company has accrued OPEB, pension and other employee benefit

liabilities during prior years.  As those payments are made to employees, the company will realize a

deduction against its future taxable income.Similarly, the Company has accrued significant reserves for

warranty and product liability obligations.  As payments are made against those reserves the Company will

realize a deduction against its future taxable income.

Manufacturing Cash Flow

62

($ in millions)

Note:  This

slide

contains

non-GAAP

information,

please

see

the

Reg

G

in

appendix

for

detailed

reconciliation

Goal

Three Months

Ended July 31st

Beginning Mfg. Cash

1

Balance

10/31/2007

10/31/2008

10/31/2009

2008

2009

2009

October 31, 2006

$1,214

October 31, 2007

$722

$722

October 31, 2008

$777

$777

April 30, 2009

$594

Approximate Cash Flows:

From Operations

($231)

$414

++

$78

$129

$142

Dividends from NFC

$400

$15

n/a

$15

$0

$0

From Investing / (Cap Ex)

($70)

($216)

-

($160)

($190)

($87)

Marketable Securities

($130)

($4)

($2)

$12

($2)

$0

From Financing / (Debt Paydown)

($480)

($133)

-

($94)

($51)

$8

Exchange Rate Effect

$19

($21)

n/a

$3

$8

$14

Blue Diamond Consolidation

$0

$0

$80

$0

$80

$80

Ending Mfg. Cash

1

Balance:

October 31, 2007

$722

July 31, 2008

$576

October 31, 2008

$777

July 31, 2009

$751

$751

October 31, 2009

$650 -

$750

1

Cash = Cash, Cash Equivalents and Marketable Securities

Nine Months Ended July 31

SEC Regulation G

63

This presentation is not in accordance with, or an alternative for, U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information presented herein should be considered

supplemental to, and

not

as

a

substitute

for,

or

superior

to,

financial

measures

calculated

in

accordance

with

GAAP.

However,

we

believe

that

non-GAAP

reporting,

giving

effect

to

the

adjustments

shown in the reconciliation above, provides meaningful information and therefore we use it to supplement our GAAP reporting by identifying items that may not be related to the core manufacturing

business.

Management often uses this information to assess and measure the performance of our operating segments. We have chosen to provide this supplemental information to investors, analysts

and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the above

reconciliations and to provide an additional measure of performance.

(Unaudited)

DEBT

YE 2005

YE 2006

YE 2007

YE 2008

2009 - 3Q

(in millions)

Manufacturing operations

January 2007 Loan Facility (Libor + 325 matures January 2012) 

-

$             

-

$             

1,330

$      

1,330

$       

1,330

$          

Bridge Loan Facility (Libor + 500)

-

1,500

-

-

-

Financing arrangements and capital lease obligations 

408

401

369

306

278

6.25% Senior Notes

400

-

-

-

-

9.375% Senior Notes

393

-

-

-

-

7.5% Senior Notes, due 2011

249

15

15

15

15

Majority owned dealership debt

245

484

267

157

162

4.75% Subordinated Exchangeable Notes, due 2009

202

1

1

1

-

2.5% Senior Convertible Notes

190

-

-

-

-

9.95% Senior Notes, due 2011

13

11

8

6

4

Other

24

60

39

19

17

Total manufacturing operations debt

2,124

2,472

2,029

1,834

1,806

Financial services operations  

Borrowing secured by asset-backed securities, at variable rates, due serially through 2016

2,779

$      

3,104

$      

2,748

$      

2,076

$       

1,439

$          

Bank revolvers, at fixed and variable rates, due dates from 2010 through 2013

838

1,426

1,354

1,370

1,259

Revolving retail warehouse facility, at variable rates, due 2010

500

500

500

500

500

Commercial Paper, at variable rates, due serially through 2010

-

28

117

162

75

  Borrowing secured by operating and finance leases, at various rate, due serially through 2016

148

116

133

132

128

Total financial services operations debt

4,265

$      

5,174

$      

4,852

$      

4,240

$       

3,401

$          

(Unaudited)

Cash & Cash Equivalents

YE 2005

YE 2006

YE 2007

YE 2008

2009 - 3Q

Manufacturing non-GAAP (Unaudited)

776

$         

1,078

$      

716

$         

775

$         

751

$             

*

Financial Services non-GAAP (Unaudited)

53

79

61

86

70

Consolidated US GAAP (Audited)

829

$         

1,157

$      

777

$         

861

$         

821

$             

Manufacturing Cash & Cash Equivalents non-GAAP (Unaudited)

776

$         

1,078

$      

716

$         

775

$         

751

$             

*

Manufacturing Marketable Securities non-GAAP (Unaudited)

91

136

6

2

-

Manufacturing Cash, Cash Equivalents & Marketable Securities non-GAAP (Unaudited)

867

$         

1,214

$      

722

$         

777

$         

751

$             

*Includes increase in cash and cash equivalents from consolidating Blue Diamond Truck and Blue Diamond Parts

(Audited)

SEC Regulation G

64

This regulation G slide corresponds with the data found in the chart on slide 15

U.S. and Canada industry

165K

185K

Sales and revenues, net

$11.5

$12.0

Manufacturing segment profit

(excludes asset impairment, Ford settlement, & related charges)

$350

$450

Asset impairment, Ford settlement, & related charges

Manufacturing segment profit

$350

$450

Below the line items

($500)

($330)

Income (Loss) before income tax

$1,100

$1,270

($170)

($70)

NA

$15+

($Millions)

($Millions)

$1,600

Target @

Current Industry

414.5K

($Billions)

~($520)

$1,600

NA

($Billions)

FY 2009

Guidance on $1.6B Mfg Segment Profit Line

Original Target @ 414.5K

Industry

SEC Regulation G –

Quarterly Comparison

65

This presentation is not in accordance with, or an alternative for, U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information presented herein should be considered

supplemental to, and

not

as

a

substitute

for,

or

superior

to,

financial

measures

calculated

in

accordance

with

GAAP.

However,

we

believe

that

non-GAAP

reporting,

giving

effect

to

the adjustments

shown in the reconciliation above, provides meaningful information and therefore we use it to supplement our GAAP reporting by identifying items that may not be related to the core manufacturing

business.

Management often uses this information to assess and measure the performance of our operating segments. We have chosen to provide this supplemental information to investors, analysts

and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the above

reconciliations and to provide an additional measure of performance.

FY08 Q3

FY07 Q3

Non GAAP

As

Reported

As

Reported

As

Reported

Without

Ford

Settlement

Ford

Settlement

Impacts

With

Ford

Settlement

U.S. and Canada industry

($Billions)

($Billions)

($Billions)

($Billions)

Sales and revenues, net

$2.5

$2.5

$4.0

$3.0

($Millions)

($Millions)

($Millions)

($Millions)

($Millions)

Manufacturing segment profit *

(excludes asset impairment, Ford settlement, & related charges)

$92

NA

$92

$483

$115

Asset impairment, Ford settlement, & related charges

NA

$18

$18

($10)

NA

Manufacturing segment profit *

$92

$18

$110

$473

$115

Below the line items

($92)

$0

($92)

($132)

($110)

Income (Loss) excluding income tax

$0

$18

$18

$341

$5

Income tax benefit (expense)

($30)

$0

($30)

($10)

($9)

Net income (loss)

($30)

$18

($12)

$331

($4)

Diluted earnings (loss) per share ($'s)

($0.42)

$0.26

($0.16)

$4.47

($0.05)

Weighted average shares outstanding: diluted

70.8M

70.8M

70.8M

74.0M

70.3M

Memo - professional fees included in below the line items

($6)

($6)

($27)

($54)

* Includes: minority interest in net income of subsidiaries of ($7)M, net of tax; extraordinary gain of $23M, net of tax

FY09 Q3

SEC Regulation G –

Fiscal Year Comparison

66

This presentation is not in accordance with, or an alternative for, U.S. generally accepted accounting principles (GAAP). The non-GAAP financial information presented herein should be considered

supplemental

to,

and

not

as

a

substitute

for,

or

superior

to,

financial

measures

calculated

in

accordance

with

GAAP.

However,

we

believe

that

non-GAAP

reporting,

giving

effect

to

the

adjustments

shown in the reconciliation above, provides meaningful information and therefore we use it to supplement our GAAP reporting by identifying items that may not be related to the core manufacturing

business.

Management often uses this information to assess and measure the performance of our operating segments. We have chosen to provide this supplemental information to investors, analysts

and other interested parties to enable them to perform additional analyses of operating results, to illustrate the results of operations giving effect to the non-GAAP adjustments shown in the above

reconciliations and to provide an additional measure of performance.

FY 2008

FY 2007

FY 2006

Estimated

As

Reported

As

Reported

As

Reported

Ford

Settlement

Impacts

U.S. and Canada industry

165K

185K

165K

185K

($Billions)

($Billions)

($Billions)

Sales and revenues, net

$11.0

$11.5

$11.0

$11.5

$14.7

$12.3

$14.2

($Millions)

($Millions)

($Millions)

($Millions)

Manufacturing segment profit *

(excludes asset impairment, Ford settlement, & related charges)

$710

$735

NA

$710

$735

$1,114

$426

$838

Asset impairment, Ford settlement, & related charges

~ $175

($395)

NA

NA

Manufacturing segment profit *

$710

$735

$175

$885

$910

$719

$426

$838

Below the line items

$0

($528)

($499)

($443)

Income (Loss) excluding income tax

$225

$250

$175

$400

$425

$191

($73)

$395

Income tax benefit (expense)

~ ($3)

($57)

($47)

($94)

Net income (loss)

$182

$207

$172

$354

$379

$134

($120)

$301

Diluted earnings (loss) per share ($'s)

$2.55

$2.85

$2.40

$4.95

$5.25

$1.82

($1.70)

$4.12

Weighted average shares outstanding: diluted

~72M

73.2M

70.3M

74.5M

Memo - professional fees included in below the line items

($40)

($30)

($40)

($30)

($154)

($224)

($70)

* Includes: minority interest in net income of subsidiaries of ($7)M, net of tax; extraordinary gain of $23M, net of tax

~72M

~72M

~($485)

~($43)

~($46)

($Millions)

($Millions)

($Billions)

($Billions)

FY 2009

Non GAAP

Goal

Goal

Without

Ford

Settlement

With

Ford

Settlement

~($485)

NA

~$175